Thatcher won the 1979 election promising a new direction for Britain, away from the ‘Post-War Consensus’ politics of her predecessors. She quoted Francis of Assisi upon her arrival in Downing Street:

“Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope”.

During her first term, she focused on economic issues. Her first chancellor was Geoffrey Howe, and he would be tasked with delivering her signature policy of ‘monetarism’, whereby the monetary supply was reduced in order to battle inflation. Howe’s budgets in 1979, 1980, and 1981, cut income tax, raised indirect taxes, and cut public expenditure (including industrial subsidies). However, the promised economic recovery failed to materialise, with unemployment and inflation rising.

Many of her ministers had doubts about her economic policies and appealed to her for a U-turn. She dubbed these figures, many of whom had sat in Heath’s frontbench, ‘wets’.  During the 1980 party conference she famously told them ‘You turn if you want to. The Lady’s not for turning’.

When Howe presented more spending cuts to the Cabinet in the summer of 1981, the Cabinet almost revolted. Environment Secretary Michael Heseltine connected the economic policy, and subsequent unemployment to rioting that had occurred in English cities that summer. Thatcher responded to the revolt by asking Howe to recalculate. Henceforth, monetarism was not as strictly applied. Two months later, Thatcher reshuffled her cabinet, replacing three ‘wets’ with more reliable allies and moving four ministers between posts. The changes left her much stronger.

In April 1982, Argentina invaded the Falklands Islands, a small British colony in the South Atlantic. Argentina’s military leaders had assumed that the British would let alone. Indeed, Thatcher herself had cut the last navy ship that had protected the islands. In response to the invasion, Foreign Secretary Lord Carrington took responsibility and resigned. Thatcher responded to the invasion with clarity and determination, swiftly ordering a task force to recapture the islands. She ordered the Argentinian cruiser, ARA General Belgrano, which was outside the British-declared ‘exclusion zone’ sunk. Over the days that followed, several British ships were destroyed by Argentinian missiles, and casualties mounted. But, once the majority of the army was ashore, they quickly destroyed the Argentinian forces, and the Falklands were British again.

Victory in the Falklands gave Thatcher a huge boost. By 1983, the economy began to show signs of recovery. Inflation fell from 18% to 8% and growth began to increase, though unemployment remained high. In the election of 1983, she won a landslide victory, with her majority rising from 44 to 144.

With a huge majority, Thatcher now set her sights on the trade unions. Uncompetitive industries were privatised, with many simply going under. In 1984, The National Union of Miners launched the biggest and most dramatic of the strikes, which lasted for an entire year and saw scenes of violence between police and the strikers. Thatcher prevailed and the strike collapsed in 1985, with most of the mines subsequently closed. Anti-trade union laws followed, with union membership halving between 1979 and 1997.

During her second ministry, Thatcher was freer to implement her more distinctive economic policies. The great state industries and companies, many nationalised by Attlee’s Labour government, were privatised. Council houses were sold to tenants. A new, financial services-based economy was encouraged by various measures that were dubbed ‘the Big Bang’ in 1986. London became one of the world’s most important financial centres.

In 1984, the Provisional IRA attempted to assassinate Thatcher with a time bomb placed near her Brighton hotel suite at the time of the party conference. Five were killed, but she was unharmed. That day, she delivered her speech to the party conference, as scheduled. Later, Thatcher signed the Anglo-Irish Agreement as a step towards ending the Troubles. The agreement proved extremely unpopular amongst Unionists, while the Nationalist IRA’s paramilitary and terror campaign continued.

Internationally, Thatcher formed a close political relationship with US President Ronald Reagan. They shared the same market-oriented economic outlook (though Reagan’s policies were, in practice, rather more conservative), belief in western ideals, and dislike of Soviet Communism.

In 1987, Thatcher won a third consecutive election victory, though she lost seats, her majority remained above 100. Her forthrightness with her colleagues only intensified. She told reporters that she intended to ‘go on and on’. In 1989, senior Conservatives attempted to persuade her to set an exit date, but she refused.

Over 1987-88, Thatcher reformed the local government taxation rates system, replacing it with a new form of flat taxation that was officially called the Community Charge, but which soon became known as the ‘poll tax’. As the full ramifications of the ‘poll tax’ emerged over 1989-90, there were protests across the country. For the first time, Thatcher lost the support of her key constituencies and became quite unpopular.

Additionally, Thatcher became far more combative towards the European Community. When she had started as Prime Minister, she had demanded a rebate of British funding, which she had received from 1985. From 1987, she grew suspicious of federalism in Brussels, and gave the Bruges speech in 1988 opposing any concept of a federal Europe. However, preparations for a new European treaty continued.

Behind the scenes, many Conservative MPs were concerned by both Thatcher’s unpopularity and by her stridency on matters like Europe. Her loyal Chancellor Nigel Lawson resigned in October 1989. Then, on 1 November 1990, Geoffrey Howe, once her Chancellor and then Foreign Secretary, resigned. His speech criticised her European policy.

The next day, Michael Heseltine announced he was challenging her for the leadership. He had resigned in 1986 due to a Cabinet disagreement over the helicopter firm Westland. At first, Thatcher thought she could continue, and she won the first ballot, but upon canvassing her ministers, she found that she could no longer count on their support. She chose to withdraw before the second ballot, throwing her support behind Chancellor John Major. She left office in November 1990.